Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income (Loss) Before Income Taxes

Income before income tax expense consists of the following:

	Years ended December 31,
	2013		2012		2011
Domestic	$	14,842	$	8,310	$	14,268
Foreign		14,020		22,632		17,437
Income (loss) before income taxes	$	28,862	$	30,942	$	31,705

Components of Income Tax Expense (Benefit)

The components of the income tax expense (benefit) for income taxes are as follows:

	Years ended December 31,
	2013			2012			2011
Current:
Federal	$	4,859		$	4,418		$	4,356
State		472			429			423
Foreign		3,751			5,537			4,195
Current income tax expense (benefit)		9,082			10,384			8,974
Deferred:
Federal		(1,105	)		(1,871	)		(400	)
State		(108	)		(183	)		(40	)
Foreign		(516	)		(386	)		(206	)
Deferred income tax expense (benefit)		(1,729	)		(2,440	)		(646	)
Income tax expense (benefit)	$	7,353		$	7,944		$	8,328

Reconciliation of Income Tax Expense (Benefit)

Income tax expense (benefit) for the years ended December 31, 2013, 2012, and 2011 differ from the amount computed by applying the federal statutory corporate rate to income before income taxes. The differences are recorded as follows:

	Years ended December 31,
	2013			2012			2011
Tax expense (benefit) at statutory rate of 35%	$	10,102		$	10,830		$	11,097
State income taxes, net of federal benefit		490			274			471
Foreign tax rate difference		(1,634	)		(2,858	)		(2,910	)
Research and development credit		(957	)		—			(418	)
Change in valuation allowance		(187	)		3			612
Equity based compensation		(212	)		(225	)		(91	)
Manufacturing credit		(249	)		(139	)		(474	)
Other		—			59			41
Total income tax expense	$	7,353		$	7,944		$	8,328

Components of Net Deferred Income Tax Assets and Liabilities

The components of the Company’s net deferred income tax assets and liabilities are as follows:

	December 31,
	2013			2012
Net deferred income tax asset - Current
Intercompany profit in inventory	$	—		$	2,252
Warranty costs		348			290
Bad debt reserve		73			139
Inventory reserve		253			1,059
Unearned service revenue		2,992			2,741
Other, net		935			735
Net deferred income tax asset - Current	$	4,601		$	7,216
Net deferred income tax asset - Non-current
Depreciation	$	(1,559	)	$	(1,871	)
Goodwill amortization		(1,841	)		(1,675	)
Product design costs		(259	)		(190	)
Employee stock options		3,021			1,548
Unearned service revenue		1,654			1,522
Loss carryforwards		14,983			14,825
Deferred income tax asset - Non-current		15,999			14,159
Valuation Allowance		(11,576	)		(11,763	)
Net deferred income tax asset - Non-current	$	4,423		$	2,396
Net deferred income tax liability - Non-current
Intangible assets	$	(1,171	)	$	(1,149	)

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Years ended December 31,
	2013		2012		2011
Balance at January 1,	$	265	$	265	$	265
Additions based on tax positions related to the current year		—		—		—
Additions for tax positions of prior years		—		—		—
Reductions for tax positions of prior years		—		—		—
Settlements		—		—		—
Balance at December 31,	$	265	$	265	$	265

Open Tax Years and Ongoing Tax Examinations in Major Jurisdictions

The table below summarizes the open tax years and ongoing tax examinations in major jurisdictions as of December 31, 2013:

Jurisdiction	Open Years		Examination in Process
United States - Federal Income Tax		2009 - 2013		N/A
United States - various states		2009 - 2013		N/A
Germany		2008 - 2013		N/A
Switzerland		2013		N/A
Singapore		2009 - 2013		N/A